If your small business has employees working in Georgia, you must pay Georgia unemployment insurance (UI) tax. The UI tax funds unemployment compensation programs for eligible employees. (In Georgia, state UI tax is just one of several taxes that employers must pay. Other important employer taxes, not covered here, include federal UI tax, and state and federal withholding taxes.)
Different states have different rules and rates for UI taxes. Here are the basic rules for Georgia's UI tax.
As a Georgia employer, your small business must establish a Georgia UI tax account with the Georgia Department of Labor (GDOL). You don't have to pay a fee to register your business with GDOL.
To register for an account with the GDOL, use Form DOL-1A, Employer Status Report. You can access and download a blank form on the GDOL website, which you must fill out and return to the GDOL via mail. Unlike other states, in Georgia, you can't register for a UI tax account online.
GDOL will review your filing, and if it determines your business is liable for UI tax, it will issue you a UI tax account number. (Most employers are liable for the tax.)
To establish your Georgia UI tax account, you'll need a federal employer identification number (EIN). You can apply for an EIN at IRS.gov. Generally, if you apply online, you will receive your EIN immediately.
As a Georgia for-profit employer, you generally are liable for state UI taxes if you meet any of the following conditions:
Basically, if your business is liable under the Federal Unemployment Tax Act (FUTA), it's likely also liable for state UI taxes, and vice versa. One piece of good news is that state UI tax payments generally can be credited against your FUTA taxes.
UI tax is paid on each employee's wages up to a maximum annual amount. In recent years in Georgia, that amount, known as the "taxable wage base," has been stable at $9,500 (2024). However, it's always possible that amount could change.
The state UI tax rate for new employers also can change from one year to the next. In recent years, the rate has been 2.7%. That rate generally remains in effect for at least 36 months.
Established employers are subject to a lower or higher rate than new employers depending on an "experience rating." This means, among other things, whether your business has ever had any employees who made claims for state unemployment benefits.
In Georgia, UI tax reports and payments are due at the end of the month following the end of each calendar quarter. In other words:
You can file your reports and payments online or on paper. To file online, go to the Employer Portal on the GDOL website. To file on paper, use Form DOL-4N, Employer's Quarterly Tax and Wage Report. You can download a blank form from the GDOL website.
You must file reports even if you pay no wages during a particular quarter. You will be subject to a penalty if you fail to file.
You are required to post a notice (poster) regarding state unemployment claims in places readily accessible to employees. The poster provides basic information on when an employee may be eligible for unemployment benefits and how to file an unemployment claim.
Employers who use independent contractors rather than hiring employees aren't subject to the UI tax. However, it's important that you don't misclassify an employee as an independent contractor.
If you misclassify an employee, you could be subject to penalties or fines.
You might decide that it's easiest to hand over responsibility for payroll, including UI taxes, to an outside payroll service. If so, keep in mind that your business, or even you personally, may still be held directly responsible for mistakes made by an outside payroll company.
This article touches on only the most basic elements of Georgia UI taxes. Avoid possible penalties for making mistakes by checking both the IRS and GDOL websites for the latest information. GDOL also has a helpful Employer Handbook that you can download from the GDOL website.
In addition to state UI tax, employers have other responsibilities not covered in this article, such as federal UI tax, state and federal withholding taxes, required reporting of new hires, and required retention of employee records.
Talk to a tax lawyer or employment attorney to learn more.